06-25-2009
Homeowners Foundation Highlights Dangers for Home Buyers

The American Homeowners Foundation (AHF), the independent national nonprofit consumer education organization serving American homeowners since 1984, has published a free guide to help home buyers avoid the many traps related to buyer representation. These traps have lead to thousands of lawsuits and caused many home buyers to pay thousands of dollars more than necessary. AHF has been warning home buyers about them for many years in its books and newsletters. According to AHF and the National Association of Realtors© (NAR), the problem is getting worse. For that reason the Foundation has compiled “The Home Buyers Guide to Real Estate Representation”, which it is providing free as a public service to American home buyers.

The process of buying a home has gotten far more complex over the years. One area that has become very complicated is buyer representation. Most home buyers deal with real estate agents and brokers in the course of their home purchase. Depending on the real estate agent and broker’s business model and the nature of the home buyers’ agreements, if any, with a real estate agent or broker, the agent and brokerage may be 100% on the buyer’s side, 100% on the seller’s side, somewhere in between, or a knowledgeable but largely disinterested third party.

The types of buyer agency business models have proliferated in recent years. They range from exclusive buyer agency, which does provide full representation to buyers, to many variations of dual agency, under which home buyers may be denied assistance in negotiating the lowest price and best terms. The alternatives available to home buyers in terms of buyer agency business models can have a major impact on the cost of a home. The problem is compounded by widespread noncompliance with state laws requiring that real estate agents and brokers make it clear who they actually represent and what services they may or may not provide.

Today many home buyers falsely believe that their real estate agent is helping them to negotiate the lowest price and most favorable terms, but in fact their real estate agent and brokerage is not, and may be helping the seller get the highest price. According to NAR’s 2007 Profile of Home Buyers and Sellers, nearly half of home buyers wrote contract offers to purchase homes without ever having been told by their agent that they were not helping the buyer negotiate the lowest price and most favorable terms.

To make an informed decision in selecting a real estate agent to work with, home buyers need to know in advance exactly what representation they will or will not be receiving from a real estate agent and brokerage. To help them, The Home Buyers Guide to Real Estate Representation includes a questionnaire home buyers can use to find that out, as well as obtain other background information that will help them pick the most qualified real estate agent. Home buyers can receive a free digital copy by sending an e-mail to .(JavaScript must be enabled to view this email address) and typing “Free Home Buyers Guide” in the subject line. They can receive a free printed copy by mailing a stamped self addressed envelope with 3 ounces of affixed postage to: AHF Free Home Buyers Guide, 6776 Little Falls Rd., Arlington, VA 22213.
The American Homeowners Foundation publishes books, model contracts, special studies and other helpful tools for home buyers and sellers and current homeowners. The Foundation’s website (www.AmericanHomeowners.org) contains much useful free information that American homeowners will find helpful in home buying, selling, remodeling, financing, and related activities.

06-19-2009
NAEBA Calls on Congress to Establish a Federal Mandate for Real Estate Agency Disclosure

The National Association of Exclusive Buyers Agents (NAEBA) released a letter to Congress today urging members to include real estate agency disclosure language in legislation relating to mortgage lending reform, including the Anti-Predatory Lending Act and the ongoing discussion over the formation of a Financial Products Safety Commission.

“Too many consumers have no idea that when they contact an agent listing a home, that agent must do everything possible to achieve the best outcome for the seller,” stated John Sullivan, President. “As a result, these consumers have no one involved from the beginning of the transaction who can advise them on negotiating techniques, price points or the acquisition of an appropriate loan.”

As Congress considers a range of measures to better inform consumers of their rights and responsibilities in the home buying process, NAEBA hopes to include clear, transparent and mandatory real estate agency disclosure language in legislative vehicles as they move forward. 

“Clear, consistent and transparent real estate agency disclosure will help consumers better understand that there are many types of real estate agents, each of whom have responsibilities to different parties in a real estate transaction,” stated Sullivan, “Common sense suggests that when an agent is representing a seller or, in the case of dual agency both parties, neither the buyer’s nor seller’s interests are fully served.  Consumers need to have all the facts in hand in order to make informed decisions.”

A recent NAEBA white paper titled “Consumer Protection and the Real Estate Industry,” makes clear the extent of the problem.  While the states have attempted to better inform consumers through state disclosure laws, inconsistencies in these laws, as well as lack of compliance and enforcement, have left most home buyers in the dark.  In fact, three studies by the National Association of Realtors since 2002 show that only about 30 to 35% of home buyers actually receive agency disclosure statements at their first meeting with a licensee, a level that is virtually unchanged since it was first revealed by the FTC in their 1983 study.

NAEBA believes that, at a minimum, consumers should know what kind of agent they have and who specifically that agent is responsible to in the transaction.  The organization is supporting language that will bring transparency to the process by:

• making clear all types of agency representation available;
• providing consistent definitions of agency throughout the country;
• clarifying the time and method of disclosure;
• obtaining written confirmation from the consumer that they have received and understand the information; and,
• providing for enforcement with significant penalties

“In keeping with ongoing efforts to provide consumers with the tools they need to avoid foreclosures, we urge Congress to establish a federal requirement for real estate agency disclosure in the home buying process.  Armed with the facts, the home buying public will be much better able to make informed and appropriate decisions – decisions that will impact their financial well-being for years,” stated Sullivan.  “We look forward to working with members of the U.S. House and Senate to help their constituents on this important issue.”

06-03-2009
Why Use an Exclusive Buyer Agent?

• Only an Exclusive Buyer Agent (often called an Exclusive Buyer's Broker) can GUARANTEE to represent you in your home purchase.
• Only an EBA can GUARANTEE to negotiate on your behalf.
• An EBA provides the true facts as to value, market/neighborhood conditions, and obvious physical defects.
• The high level of negotiation training and expertise of an EBA truly levels the playing when it is time to make an offer on a property.
• Because an EBA only represents buyers and does not have in-house or company listings, a seller is always unaware of the price buyers are willing to spend during the negotiation process, bringing the advantage back to the buyer and the buyer's wallet. For this reason alone, it is very common to save thousands of dollars during the critical negotiation process.
• An EBA will insist that the buyer utilize a qualified home inspector who will treat the buyer as their client, and not as a customer.
• Listing agents (the ones with the sign in the front yard) and the company that they work for represent the SELLER, not the buyer. Their job is to get the SELLER the highest price on the best terms.
• An EBA's job is to get the BUYER the lowest price on the best terms.
• EBAs will do a better job for transferees that anyone else. They will give you the facts, good and bad.
• A listing agent cannot tell you about many things that would be detrimental for the BUYER because they work for the SELLER.
• An EBA will help you with your financing alternatives. They may advise you to be pre-approved by a lender. Why? Because a fully approved loan makes you a cash buyer.
• EBA’s have a legal and ethical obligation to put your interests first!
• It just makes sense!

Let NAEBA help you ... Find Your Best Agent!

06-02-2009
HUD Secretary Donovan Announces Plan for Immediate Access to First Time Home Buyer Credit

Qualified first time home buyers will be eligible for a tax credit of up to $8,000 when filing their annual tax return.  On Friday, May 29, 2009, however, HUD Secretary Donovan announced that the tax credit may be immediately available to those buyers.

Currently, borrowers who apply for an FHA-insured mortgage are required to make a minimum down payment of 3.5% when purchasing a home.  The 3.5% is still required, but now lenders can monetize the tax credit to cover closing costs or for an additional down payment.  According to HUD, "this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit."

For more information, see the press release from HUD or view Mortgagee Letter 09-15.  

06-01-2009
Protection During the Home Buying Process

Enjoy peace of mind during the home buying process by planning ahead and finding a buyer agent before you shop for your new home.

The ideal agent, one exclusively representing real estate buyers, can be found through an interview based on the kind of questions they hope buyers will ask of them.

Don’t make the mistake of finding your agent through an Open House or calling the Listing Agent or real estate office about a particular home. Since it is not uncommon for new agents or part-timers to conduct Open Houses and do "up-time" answering the phones at the real estate offices, you may end up with someone who hasn't had much experience.

If you call Listing Agents who specialize in listing houses, not focusing on buyers' needs, you may end up with an agent who will do a better job selling your house when the time comes rather than serving your needs and wants now as a home buyer.

NAEBA members work under a defined Code of Ethics and Standards of Practice , both of which revolve around the idea of buyer representation. This means that you can relax, knowing that your EBA is doing their best to protect you throughout the home buying process.

05-27-2009
A NAEBA real estate agent has no hidden agenda. They only represent the buyer

Real Estate Negotiations are Handled by a Home Buying Expert

Home buying assistance from exclusive buyer’s agents focus on negotiations since they devote their work to the buying side and are considered home buying experts. They understand that home buyers value their negotiation skills and that ‘everything is negotiable’ in real estate. Not just price but terms, conditions, contract clauses, disclaimers, exclusions, and dates.

Exclusive buyer’s agents will make sure the sellers know about other competitively priced homes on the market competing against theirs. They will attempt to learn the sellers’ motivation for selling, bottom line price and any deadlines they are trying to meet. They will ask if there have been other offers or if they have any offers at the present time. They will use clauses and contingencies in the offer to protect your earnest money deposit as well as afford you the time for the appropriate inspections necessary to learn more about the home.

They may suggest requiring a short window of time for the seller to respond to your offer depending on the type of market. The state of the market, whether it be a seller’s market or buyer’s market can affect your negotiations dramatically. When there are rising prices, fewer homes, and multiple offers competing against yours, you have must less of a chance of getting a bargain. You may end up in a bidding war when the market is ‘hot’ and it may even be necessary for you to be likable to the sellers when they must choose from among several offers on the table. On the other hand, when it is a buyer’s market, sellers are forced to be more accommodating and you will strike your best deal.

The exclusive buyer’s agent will advise you how long the property has been on the market as well as conduct a property value study or prepare a CMA (comparative market analysis) to help you decide the amount of the initial offer. They will encourage you to try to find at least two homes, preferably three homes that satisfy you to improve your bargaining position for your first choice home .

A thorough home inspection will also help you determine if the home is in the condition represented by the seller and the home buying expert will be ready to renegotiate should there be repairs needed or a request for a credit to cover repairs. Be prepared to walk away if you cannot strike a deal. It is a good way to test your resolve about the value of the house.

 

05-20-2009
No Compromise. How a NAEBA agent gets you a better buy

A better selection of homes to choose from is the goal of many home buyers as they set out to buy their next home. One way of achieving a greater ‘inventory’ of homes to select from is to choose agents who are exclusively representing real estate buyers. These exclusive buyer’s agents have made the commitment to identify all homes in the marketplace, including homes listed in the Multiple Listing Service (MLS).

This commitment to a comprehensive search for all available properties can be especially important when looking for luxury real estate such as vacation homes , estate homes , and other luxury homes .

For Sale By Owner (FSBO) homes are important in markets that still have a shortage of inventory or are active ‘seller markets’ where homes go under agreement quickly. Exclusive buyer’s agents will ensure that home buyers have access to all of the data on listed homes including the address and complete property data as well as the basic facts about the for-sale-by-owner homes .

For a better selection of homes to choose from, shop for an exclusive buyer’s agent who can expand your search to the full range of homes on the market, including for-sale-by-owner homes .

05-06-2009
Due Diligence. How a NAEBA agent does it better

Enjoy peace of mind during the home buying process by planning ahead and shopping for your real estate agent before you shop for your new home. Don’t get so caught up in the excitement of buying a new home that you miss out on the chance to have a real estate agent on your side.

Peace of mind starts with selecting a real estate agent from the pool of agents dedicated to buyers needs by exclusively representing real estate buyers only and ends with the satisfied feeling at closing that you were protected in all aspects of the transaction – location, negotiation , inspection, and getting the best mortgage rate .

While any real estate agent can arrange property showings, provide mortgage assistance, print up information from the Multiple Listing Service (MLS), explain the forms and agreements, and track the whole process, an exclusive buyer’s agent will point out reasons not to buy a particular property, negotiate aggressively for the best price and terms , include protective contingency clause in contracts to protect your interests, and most importantly, keep confidential any information that could hurt your bargaining position.

If you are looking for high end real estate , luxury real estate , or are buying a vacation home this representation becomes especially important.

When working with a NAEBA-member exclusive buyer's agent, you are assured of ethical conduct and adherence to NAEBA standards of practice .

02-16-2009
Site 2.0 Release

Please check out our new 2.0 site release!